Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

The Treasury has appropriately taken a very conservative view of the costings. It is true to say the industry has a very different view of what the costings will be. The Treasury has assumed in its costings a gearing rate of zero, as is appropriate that the Treasury do. The industry has a very different view of the gearing rate. Time will tell what the costings will sort out. As is noted in the budget papers—and the shadow Assistant Treasurer may or may not have read the particular budget paper—the Treasury acknowledges that this costing does not take into account increased investment that would flow out of the withholding tax cut. It does not take into account second-round effects. Of course we stand by the Treasury costings. Treasury has taken a very conservative approach, and it is appropriate the government adopts a very conservative approach. Others take the view that the cost will be much lower. I pass no judgement. Time will tell what the costing will be. The government looked very closely at the costings and took the view that, even with the more expensive costing, this was an appropriate and necessary policy response and we are very proud of it. We are very disappointed that the opposition has taken such a Hansonesque, narrow, inward-looking and shameful approach to this matter.

I will refer now to the opposition’s call for this legislation to be referred to a Senate committee. Again, the shadow Assistant Treasurer appears ignorant of the fact that the Senate economics committee has already looked at it in some detail. The Senate economics committee members said that, according to the transcript of the evidence, their analysis of the previous government’s changes was one of the most worth while and interesting they had done. The shadow Assistant Treasurer appears ignorant of the fact that the Senate economics committee has already examined the rates of withholding tax in Australia in some considerable amount of detail. We are normally more than happy for our policy proposals to be examined by the Senate economics committee. But the opposition are proposing, by referring this to a Senate economics committee, to abandon the 1 July start date. It would be impossible, in my mind, to have the Senate economics committee examine the case and still have a 1 July start date. If the opposition want to put in jeopardy the 1 July start date, it is their decision. Be it on their heads. They will have to justify to the funds management industry and to the Australian people why they are delaying this very important initiative in making Australia the financial services hub of Asia. If they wish to do that, they will have the power if they can convince their Senate colleagues to support it. It will be up to them. But they will have to justify it. I am not going to justify it. I want to see it in place on 1 July. They have to justify it.

Can I also refer to the opposition’s request to the government to split this bill in two—that is, ‘We accept that the Prime Minister’s Literary Awards should not be taxed and that that should be in place by 1 July, so please split the bill in two.’ We have a different view. We have the view that both measures should be in by 1 July, so will not be agreeing to the opposition’s request.

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